The Salary History Ban: What does this mean for Hiring Procedures?

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Legislation Spreading Across United States to Ban Compensation History Questions from Hiring Process

Salary History Ban Trending

Trending this year on the regulatory front are state and municipal bans on interview questions regarding salary history or previous salary information. Driven primarily by efforts to curb the perpetuation of the wage gap for both minorities and women in the workplace, the banning of salary history related interview questions also bans organizations in certain areas from sharing previous salary information with other organizations.

More employers are reviewing policies around previous salary information and salary history questions during the interview and onboarding process. This part of many hiring processes is coming into focus as more areas pass legislation banning these and similar questions from employers hiring and onboarding procedures.

Many employers have taken it a step further to make new policies regarding salary history inquiry and previous employee information nationwide, or in some cases global, depending on their footprint. This relieves the burden of updating policy in certain areas as new legislature passes to ensure compliance and is in anticipation of similar bans being more widely adopted on a national and global level. However, there are other organizations making the same sweeping changes in order to embrace the motivator related to the elimination of the wage gap and its perpetuation based on previous compensation data of an individual versus the compensation that is appropriate for a position and its responsibilities.

TIMELINE OF CURRENT REGULATIONS

March 2017 - Pittsburgh banned city agencies from asking about candidates' pay history. The rule only effects city employees.
June 2017 - New Orleans banned inquiries about all city departments and employees of contractors who work for the city. The rule only impacts individuals who are interviewing to work for the city of New Orleans.
October 2017 - New York City ban on public and private employees from asking about a candidate's pay history.
December 2017 - Delaware ban on all employers from asking candidates about their salary history.
January 2018 - California ban on private and public employers from asking about a candidate's pay history
March 2018 - Puerto Rico ban on employers from inquiring about a candidate's pay history.
May 2018 - Philadelphia banned the salary history question for all employers. The rule was supposed to take effect May 23, but a judge halted it temporarily due to a lawsuit from the Chamber of Commerce.
July 2018 - Massachusetts prohibits all employers from inquiring about a candidate's pay history.
July 2018 - San Francisco bans employers from asking applicants (contractors and subcontractors included) for their compensation history. Employers also can’t disclose a current or former employee’s salary history without that person’s explicit permission.
January 2019 - Oregon ban on all employers for inquiring about a candidate's salary history.

Looking Forward

It’s expected that a minimum of 11 US states will consider passing similar legislation in 2018. Florida and New Hampshire have already drafted pay equity bills that include bans on disclosure of past salary history for consideration during their respective 2018 state legislative sessions. Many employers are creating new hiring process to exclude the practice of asking for or using past salary history during the interview and candidate selection process to get ahead of legislation that may be passed in more of the United States over the coming years.

Prompted by the growing demand for pay equality reviewing hiring processes and paperwork to see if everything is both consistent and compliant with new laws in the areas where organizations are hiring is more important now than ever. Pressure on legislators at all levels to implement pay equality inspired regulations is increasing. It’s only a matter of time before the majority of the United States and soon global markets are subject to similar restrictions.

What is next?

Review your hiring process and related documentation including applications, templates, emails and any other communications involved in the hiring process. Train existing staff who come into contact with candidates at any point during the hiring process. Refrain from releasing salary information for past or current employees to other organizations without written authorization from the employee. Review your local and state laws for any exceptions to this such as collective bargaining agreements or in cases where salaries are publicly available.